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Tesco confirms new price for dairy farmers

4 October 2013

Tesco has today confirmed the new milk price it will pay its dairy farmers following an independent review. Tesco Sustainable Dairy Group (TSDG) farmers will receive the new price of up to 31.58 pence per litre from 1st October 2012 – one of the highest prices paid by any retailer for milk.

Tesco today announced it will be increasing the price it pays British dairy farmers for their milk, following an independent review.

Tesco Sustainable Dairy Group members submitting data via Promar will receive the new price of 33.79ppl for their milk from 1st November 2013.

The result of the Promar independent tracker has shown an increase of 0.54ppl in the cost of production, mainly as a result of increased feed costs. Since April, due to the poor spring weather milk volume output has not recovered as quickly as expected. As a result, Tesco has agreed with the TSDG farmer committee to increase the price by a further 0.48ppl from the 1st of November 2013. This results in a total increase of 1.02ppl.

The increased price announced today is good news for farmers and customers. Tesco guarantees TSDG farmers always receive a price that is above the cost of production, ensuring that their business turns a profit so they can plan and invest for the future. Customers can be assured that because Tesco is the only major supermarket to guarantee that its milk is 100% segregated, every litre of own-brand milk they buy has come from a TSDG farmer, and they are therefore supporting a sustainable future for the British dairy industry.

John Scouler, Tesco Commercial Director said: “This increase will benefit the 700 farmers who make up the Tesco Sustainable Dairy Group. It reflects our commitment to recognise the true cost of the production of milk, and pay a price above that cost. The TSDG has now been running for six years and we are proud to continue to lead the way in offering dairy farmers a fair price and support British agriculture.”

Will Hosford, dairy farmer and Farmer Committee Chairman said: “Despite the good weather we’ve experienced this summer, the dairy industry continues to feel the effects of the extreme weather at the start of the year and the market remains volatile. The security and confidence that Tesco provides farmers through the TSDG is more important than ever as we look to prepare for the upcoming winter.”

Since 2007 Tesco has invested over £180 million into the Tesco Sustainable Dairy Group in paying an above-average price to British dairy farmers, improving animal welfare and environmental standards, and a next generation scholarship programme.

Ends

Notes to editors

Every litre of Tesco own label fresh milk, with the exception of Organic milk, is covered by the new price.

An independent review of the price paid to TSDG farmers is carried out every six months by Promar, the UK’s largest agricultural and agri-food consultancy.

TSDG members who receive the 0.5ppl Promar supplement will receive a standard litre price of 33.79 effective from 1st November 2013.

TSDG members not participating in the Cost Tracker will receive a standard litre price of 33.29ppl effective from 1st November 2013.

The commitment of TSDG is further reinforced by Tesco's work with Liverpool University through its 'Dairy Centre of Excellence'. This exclusive agreement brings together the dairy sector to look at issues from animal welfare to consumer trends. In January 2008 we also launched a visitor centre which is a national resource point for schools, farmers and dairy industry experts and over 1000 children have now visited.

At the last annual TSDG conference 87% of dairy farmers said they were proud to be members of the Tesco Sustainable Dairy Group and 55% of members are planning to expand their business within the next 5 years.

For more information please contact the Tesco Press Office on 01992 644645 We are a team of over 530,000 people in 12 markets dedicated to bringing the best value, choice and service to our millions of customers each week. Our core purpose is 'we make what matters better, together'.